Piper Sandler has adjusted its outlook on Workday (WDAY, Financial), lowering the firm's price target from $290 to $230 and maintaining a Neutral rating on the stock. This revision is part of a broader reassessment across the cloud applications and analytics sectors as the industry navigates several challenges.
The decision reflects concerns over diminishing short-term growth, driven by tariff issues, policy changes, and obstacles related to the adoption of artificial intelligence. These elements have contributed to a decline in investor confidence, as the sector experiences its fourth consecutive year of slowing growth.
Despite direct tariff impacts on software models being minimal, valuation multiples within the sector have reached their lowest levels in seven years. The noted difficulty in AI integration suggests that previous enthusiasm regarding artificial intelligence may be waning, further complicating the growth outlook for companies like Workday.
